Contractor for Health Connection website to repay $45 million

The prime contractor hired to build Maryland’s health exchange web site will pay $45 million to avoid legal action over its performance, Maryland’s governor and attorney general announced Tuesday.

Noridian Healthcare Solutions LLC has agreed to pay $20 million upfront, and an additional $25 million in annual installments of $5 million over five years. The payments represent a recovery of 61 percent of the total paid to the company for the failed web site development and launch in 2013.

The agreement is subject to regulatory approvals. It will lead to the recovery of funds for both Maryland and the federal Centers for Medicare and Medicaid Services, which provided significant funding to develop the exchange.

Noridian Healthcare Solutions’ parent company has agreed to guarantee at least $40 million of the settlement payment. The settlement agreement also releases Maryland from all contractual obligations with Noridian Healthcare Solutions. Investigation of claims against other companies involved in the development and launch of the Maryland exchange is continuing.